Apple App Store Makes Inroads in Asian Market

Apple App Store Markets by Country. Graphic Credit Distimo.

While most Apple app developers have been focusing on North American and European markets, new research shows that the sleeping giant of Asia has awoken as one of the largest and hungriest consumers of iPhone apps.

According to application research firm Distimo, app downloads in the Apple App Store for iPhone took place at unprecedented rates in 14 Asian countries, resulting in significant growth in those markets. Meanwhile, many Western countries saw a decrease in download volume during the same time frame.

Over the last six months China surpassed countries like France and Germany in terms of download volume, settling in as the second-largest market behind the United States, according to Distimo.

The download volume in South Korea was remarkable, too. Despite having a smaller population than Germany and France, South Koreans downloaded more apps. The country further stands out because game applications–which typically account for a great percentage of a country’s app downloads–are unavailable in South Korea.

“This means that not only are all of the applicationsdownloads already higher than expected in South Korea, but that all of the downloadscan be attributed to non-Games categories,” according to Distimo. “This makes South Korea a particularlyinteresting country for non-Games publishers and developers to target.”

Paid Downloads Proportionally Lower

While the Asian market is hungry for apps, the research showed that, in comparison with the United States, people downloading in the Asian market were less inclined to download paid-for apps.

According to Distimo:

“The average download volume of the 300 most popular applications (free and paid) in all Asian countries combined is about equal to the average volume in the United States. However, when looking at paid applications only, this ratio drops to one-third, i.e., iPhone users in the United States are more eager to pay for applications. Excluding Japan, this figure even drops to one-sixth.”

In addition, the Asian market has shown aversions to the in-app purchase model, with exception to Singapore and Malaysia.

Revenue from apps that feature in-app purchases in the US was 68 percent in May 2011. This percentage is well above most Asian countries like China (34 percent), Sri Lanka (27 percent), and Taiwan and Thailand, which both registered at just below 50 percent. Singapore and Malaysia broke the mold, however, both generating more in-app revenue than the US. Singapore, for example, had in-app revenues of 79 percent.

With the vast majority of Asian markets generating low revenue percentages form in-app purchases, Distimo said, “developers can not yet easily monetize by including in-app purchases in Asia.”

But Distimo added that this trend could quickly change, pointing out that in June 2010 in-app purchases only accounted for a mere 39 percent of revenues in the US.

For the time being, however, Distimo recommended focusing on advertising revenues to monetize apps, a piece of advice which is still promising as developers could ride the recent Asian surge in download volume.

Additionally, the research suggested that Asian markets tend to enjoy the same categories of apps that Western countries do.

View the full Distimo report here.

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